View Full Version : Supply and demand rule the road, and what drives on it


HotRodSaint
09-05-05, 12:33 PM
The we-told-you-sos have it wrong about what Hurricane Katrina-induced $3-a-gallon gas means for Detroit. (http://www.detnews.com/2005/insiders/0509/05/B01-302716.htm)

Sliding sales of big SUVs, gas lines at some stations and fears that prices will go even higher as the oil industry struggles to rebuild refineries and oil platforms in the Gulf of Mexico aren't proof that what the country needs are stiffer federal fuel-economy rules.

They're proof that the market forces of supply and demand are the sternest disciplinarian of all.

Higher prices did what higher fuel-economy rules couldn't.

It's time to tax gasoline, so that consumer habits permanantly change.

Otherwise, people will start buying Escalades again and never think twice about it. :D

HotRodSaint
09-05-05, 12:40 PM
Even before fuel price spike, consumers turned away from gas-guzzlers (http://www.autonews.com/article.cms?articleId=54386)

Even before the humongous gasoline price hikes triggered by Hurricane Katrina, Americans were turning away from gas-swilling pickups and SUVs last month and were buying - of all things - cars.

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Vehicles such as the Ford Explorer and Chevrolet Silverado got hammered. Little cars such as the Toyota Prius and Kia Spectra had a ball.

American Honda had its best car month in history.

And Toyota-Lexus-Scion outsold the Chrysler group (Chrysler-Dodge-Jeep) in August and was within 1,000 units of DaimlerChrysler (Chrysler group-Mercedes-Maybach).

Sales of Toyota's Prius hybrid more than doubled - 9,850 vs. 4,393 in 2004.

General Motors' market share fell like a rock in August to 23.4 percent. GM is the nation's leading seller of trucks but was hurt by shrinking inventories.

<snip>

"Consumers have a changed mind-set about gas prices," Jesse Toprak, an analyst at Edmunds.com, told Automotive News. "They are more careful about long-term purchases of

SUVs because they have no trust in the oil market."

In August sales of minivans, full-sized vans and compact pickups rose, but big pickups and SUVs got socked. For the honest-to-God SUVs, the bigger the vehicle, the greater the loss.

Examples: Chevrolet Tahoe, down 33.9 percent compared with August 2004; Ford Expedition, off 40.2 percent; Toyota Sequoia, down 29.4 percent.

Chevrolet Silverado pickup sales tumbled 32.8 percent from last year with tight supply partly to blame. The GMC Sierra, the Silverado's sibling, was down 30.3 percent.

All types of car-based SUVs were up, and the segment notched a gain of 19.3 percent over last year.

As trucks struggled in August, many car segments soared. Sales in the small-car segment, including such models as the Chevrolet Cobalt, Ford Focus, Nissan Sentra and Toyota Corolla, rose 12.1 percent.